<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 22, 1996
REGISTRATION NO. 333-4793
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- -------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT
NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
SILICON GAMING, INC.
CALIFORNIA 7372 77-0357939
(STATE OR JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
2800 W. BAYSHORE ROAD
PALO ALTO, CA 94303
(415) 842-9000
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL
PLACE OF BUSINESS)
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DONALD J. MASSARO
CHIEF EXECUTIVE OFFICER
SILICON GAMING, INC.
2800 W. BAYSHORE ROAD
PALO ALTO, CA 94303
(415) 842-9000
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES TO:
JAMES M. KOSHLAND, ESQ. JOHN HALLE, ESQ.
PAUL A. BLUMENSTEIN, ESQ. RONALD J. LONE, ESQ.
WILLIAM A. RODONI, ESQ. CHRISTOPHER J. VOSS, ESQ.
GRAY CARY WARE & FREIDENRICH STOEL RIVES LLP
A PROFESSIONAL CORPORATION 900 SW FIFTH AVENUE
400 HAMILTON AVENUE PORTLAND, OR 97204
PALO ALTO, CA 94301 (503) 224-3380
(415) 328-6561
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $0.001 par
value................. 4,025,000 $12.00 $48,300,000 $16,656
============================================================================================
</TABLE>
(1) Includes 525,000 shares which the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purposes of computing the registration fee.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) THE FOLLOWING IS A LIST OF EXHIBITS FILED HEREWITH AS A PART OF THIS
REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<C> <S>
1.1 Form of Underwriting Agreement.
1.2 Form of Representatives' Warrant.
3.1 (3) Third Amended & Restated Articles of Incorporation of the
Registrant, as proposed to be amended.
3.2 (2) Bylaws of the Registrant.
3.3 (3) Proposed Amended and Restated Articles of Incorporation of the
Registrant (to be effective after the offering).
5.1 (3) Opinion of Gray Cary Ware & Freidenrich, A Professional
Corporation.
7.1 (2) Opinion of Gray Cary Ware & Freidenrich, A Professional
Corporation, regarding liquidation preferences.
10.1 (2) Amended and Restated 1994 Stock Option Plan, as amended.
10.2 (2) Lease Agreement dated September 14, 1995, between the Registrant
and Demmon Family Partnership.
10.3 (2) Founders Stock Purchase Agreements dated September 14, 1993,
between the Registrant and Robert M. Fell and David S. Morse,
respectively.
10.4 (2) Series A Preferred Stock Purchase Agreement dated as of May 12,
1994.
10.5 (2) Series B Preferred Stock Purchase Agreement dated as of August
10, 1995.
10.6 (3) Series C Preferred Stock Purchase Agreement dated as of March 21,
1996, as amended May 29, 1996.
10.7 (2) Second Amended and Restated Rights Agreement dated as of March
21, 1996.
10.8 (2) Master Equipment Lease Agreement dated October 6, 1995, between
the Registrant and Lighthouse Capital Partners, L.P.
10.9 (2) Letter agreement dated December 8, 1994, between the Registrant
and IDEO Product Development providing for product development.
10.10 (2) Side Letter Agreement dated March 21, 1996, between the
Registrant and the Interpublic Group of Companies, Inc.
10.11 (2) Side Letter Agreement dated March 21, 1996, between the
Registrant and Station Casinos, Inc.
10.12 (2) ASIC Design and Development Agreement dated January 1995 between
the Registrant and RAVIcad, Inc.
10.13 (2) License Agreement dated February 6, 1995, between the Registrant
and RAVIcad, Inc.
10.14 (2) ASIC Design and Development Agreement dated February 15, 1995,
between the Registrant and RAVIcad, Inc.
10.15 (2) OEM Master License Agreement dated April 17, 1996, between the
Registrant and RSA Data Security, Inc.
10.16 (2) Agreement dated March 26, 1996, between the Registrant and
MICROID Research.
10.17 (2) Management Services Agreement by and between the Registrant and
Interactive Partners.
10.18 (3) Employment Agreement dated May 25, 1995, by and between the
Registrant and Donald J. Massaro.
10.19 (2) 1996 Employee Stock Purchase Plan.
10.20 (2) 1996 Outside Directors Stock Option Plan.
10.21 (1)* Software Licence Agreement dated June 20, 1996 between the
Registrant and Duck Corporation.
11.1 (2) Statement of Computation of Loss Per Share.
16.1 (2) Letter re change in certifying accountant.
21.1 (3) Subsidiaries of the registrant.
23.1 (1) Consent of Deloitte & Touche LLP.
23.2 (3) Consent of Horn, Goldberg, Gorny, Daniels, Plackter, Weiss &
Casiello, P.C.
23.3 (3) Consent of Green, Schaff & Margo, P.C.
23.4 (3) Consent of Waycaster & Warren.
23.5 (3) Consent of Lionel, Sawyer & Collins.
23.6 (3) Consent of Gray Cary Ware & Freidenrich, A Professional
Corporation. Reference is made to Exhibit 5.1.
24.1 (3) Power of Attorney (included on page II-5 hereof).
27 (2) Financial Data Schedule.
</TABLE>
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(1)To be filed by amendment.
(2) Incorporated by reference to identically numbered exhibit to Registrant's
Registration Statement on Form 10 (No. 0-28294) filed with the Commission
on April 24, 1996, as amended by Form 10-A Amendment No. 1 filed with the
commission on June 13, 1996.
(3) Previously Filed.
*Confidential Treatment has been requested as to a portion of this Exhibit.
II-2
<PAGE>
EXHIBIT 1.1
3,500,000 Shares
Silicon Gaming, Inc.
Common Stock
UNDERWRITING AGREEMENT
__________________, 1996
Deutsche Morgan Grenfell/C. J. Lawrence Inc.
Bear, Stearns & Co. Inc.
Montgomery Securities
Oppenheimer & Co., Inc.
c/o Deutsche Morgan Grenfell/C. J. Lawrence Inc.
31 West 52nd Street
New York, New York 10019-6160
As the Representatives of the
several Underwriters named
on Schedule I attached hereto
Ladies and Gentlemen:
Silicon Gaming, Inc., a California corporation (the "Company"), proposes to
sell to you and the other underwriters named on Schedule I to this Agreement
(the "Underwriters"), for whom you are acting as Representatives, an aggregate
of 3,500,000 shares (the "Firm Shares") of the Company's Common Stock, $0.001
par value per share (the "Common Stock"). In addition, the Company proposes to
grant to the Underwriters an option to purchase up to an additional 525,000
shares (the "Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the representations,
-------------------------------
warranties, and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at $________ per share (the "Initial Price"), the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule I to this
Agreement.
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<PAGE>
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares at the
Initial Price. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, Eastern Time, on the second business day before the Firm
Shares Closing Date (as defined below), and only once thereafter within 30 days
after the date of this Agreement, in each case upon written or telegraphic
notice, or verbal or telephonic notice confirmed by written or telegraphic
notice, by the Representatives to the Company no later than 12:00 noon, Eastern
Time, on the second business day before the Firm Shares Closing Date, or at
least three business days before the Option Shares Closing Date (as defined
below), as the case may be, setting forth the number of Option Shares to be
purchased and the time and date (if other than the Firm Shares Closing Date) of
such purchase.
2. Delivery And Payment. Delivery by the Company of the Firm Shares to
--------------------
the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by bank wire transfer to an account specified by the
Company, shall take place at 10:00 a.m., Eastern Time, on the third business day
following the date of this Agreement (or the fourth business day if permitted by
Rule 15c6-1(c) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), or at such time on such other date, not later than 10
business days after the date of this Agreement, as shall be agreed upon by the
Company and the Representatives (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In the event that the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price by bank wire transfer to an account specified by the Company shall take
place at the time and on the date (which may be the same date as, but in no
event shall be earlier than, the Firm Shares Closing Date) specified in the
notice referred to in Section l(b) (such time and date of delivery and payment
are called the "Option Shares Closing Date"). The Firm Shares Closing Date and
the Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
l(b), and shall be made available to the
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<PAGE>
Representatives for checking and packaging, at such place as is designated by
the Representatives, on the full business day before the Firm Shares Closing
Date (or the Option Shares Closing Date in the case of the Option Shares).
In addition to the sums payable to the Representatives as provided
elsewhere herein, the Representatives shall be entitled to receive at the Firm
Shares Closing Date, as additional compensation for their services, warrants for
the purchase of an aggregate of up to 177,777 shares at an exercise price equal
to $_____ per share, upon the terms and subject to adjustment and conversion as
described in the form of purchase warrant most recently filed as an exhibit to
the Registration Statement (the "Representatives' Warrants").
3. Registration Statement and Prospectus; Public Offering. The Company
------------------------------------------------------
has prepared in conformity with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the published rules and regulations
thereunder (the "Rules") adopted by the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-4793), including a
preliminary prospectus relating to the Shares, and has filed with the Commission
the Registration Statement (as hereinafter defined) and such amendments thereof
as may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereof) and of the related
preliminary prospectus have heretofore been delivered by the Company to you. The
term "preliminary prospectus" as used hereinafter means any preliminary
prospectus (as described in Rule 430 of the Rules) relating to the Shares
included at any time as a part of the Registration Statement. The Registration
Statement as amended at the time and on the date it becomes effective (the
"Effective Date"), including all exhibits and information, if any, deemed to be
part of the Registration Statement pursuant to Rule 424(b), Rule 430A and Rule
434 of the Rules, is called the "Registration Statement." The term "Prospectus"
means the prospectus relating to the Shares in the form first used to confirm
sales of the Shares (whether such prospectus was included in the Registration
Statement at the time of effectiveness or was subsequently filed with the
Commission pursuant to Rule 424(b) of the Rules).
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Representatives
deem advisable. The Company hereby confirms that the Underwriters and dealers
have been authorized to distribute or cause to be distributed each preliminary
prospectus and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to each Underwriter as follows:
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<PAGE>
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of California. The
Company is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties
(owned, leased, or licensed) or the nature of its business makes such
qualification necessary, except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or properties,
business, results of operations, prospects or financial condition of the
Company. The Company does not own, lease or license any asset or property or
conduct any business outside the United States of America. Each of Silicon
Gaming-Nevada, Inc., Silicon Gaming-Mississippi, Inc., Silicon Gaming-Colorado,
Inc., and Silicon Gaming-Missouri, Inc. (each a "Subsidiary" and, collectively,
the "Subsidiaries"), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its state or other jurisdiction
of incorporation. Each Subsidiary is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the character or location of
its assets or properties (owned, leased or licensed) or the nature of its
business makes such qualification necessary, except for such jurisdictions where
the failure to qualify would not have a material adverse affect on the assets or
properties, business, results of operations or financial condition of the
Company. The Company does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business organization other
than the Subsidiaries.
(b) The Company and each of the Subsidiaries have all requisite
corporate power and authority, and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity, including any
and all licenses, permits and approvals required under any foreign, federal,
state or local law to own, lease and license its assets and properties and to
conduct its businesses as now being conducted and, with the exception of such
approvals, licenses, permits or other authorizations as may be required under
laws, rules and regulations governing any aspect of legalized gaming
(collectively, "Gaming Laws"), as proposed to be conducted as described in the
Registration Statement and the Prospectus. The Company (i) has been duly
licensed under the Gaming Laws of Nevada and Mississippi; (ii) has made all
required applications for licenses, permits or other approvals applicable to the
Company or its products under the Gaming Laws of those jurisdictions in which
the Registration Statement discloses that it has made such application; and
(iii) intends to make such further applications for licenses, permits or other
approvals under the Gaming Laws of such other jurisdictions as to which the
Registration Statement discloses such intention. Except as disclosed in the
Registration Statement and the Prospectus, the Company has no reason to believe
that the licenses, permits or other approvals for which it has applied and
intends to apply, as disclosed in the Registration Statement and the Prospectus,
will not be granted in due course and without unusual limitation or delay, or
that such licenses will not be sufficient
-4-
<PAGE>
in all material respects to permit the Company to conduct its business as
described in the Registration Statement and the Prospectus. The Company has no
reason to believe that any current executive officer of the Company will not be
deemed licensable without material restriction or limitation in any jurisdiction
in which the Company intends to do business requiring such persons to be so
licensed, as disclosed in the Registration Statement and the Prospectus. The
Company and each of the Subsidiaries have fulfilled and performed in all
material respects all of their obligations with respect to such authorizations,
approvals, consents, orders, licenses, certificates and permits, and neither the
Company nor any Subsidiary is in violation of any term or provision of any such
authorizations, approvals, consents, orders, licenses, certificates or permits,
nor has any event occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or which could result in any material
impairment of the rights of the holder thereof. No such authorization, approval,
consent, order, license, certificate or permit contains a materially burdensome
restriction other than as disclosed in the Registration Statement and the
Prospectus. Neither the Company nor any of the subsidiaries has any reason to
believe that any governmental or regulatory body is considering modifying,
limiting, conditioning, suspending, revoking or not renewing any such
authorizations, approvals, consents, orders, licenses, certificates or permits
of the Company or of any of the Subsidiaries or that such governmental or
regulatory bodies are investigating the Company or any of the Subsidiaries or
related parties (other than normal overseeing reviews by such bodies incident to
the gaming activities of the Company and the Subsidiaries).
(c) The Company and/or its Subsidiaries own, or have enforceable
rights to use, all material trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how and other
similar rights, technology and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of the business of Company as described
in the Registration Statement and the Prospectus. Neither the Company nor any of
the Subsidiaries has received any notice of, and they are not aware of, any
infringement of, or conflict with asserted rights of others with respect to, any
Intangibles which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect upon the
assets or properties, business, results of operations, prospects or financial
condition of the Company. The Intangibles are free and clear of all liens and
encumbrances of every nature and kind. Except as disclosed in the Registration
Statement and the Prospectus, neither the Company nor any of the Subsidiaries
has violated or infringed any copyright or, to its knowledge, any patent,
trademark, trade name, or trade secret held by others or any license,
authorization or permit held by them, in any manner which may materially
adversely affect the Intangibles or the business of the Company. Except in
connection with transactions entered into in the ordinary course of business,
neither the Company nor any of the Subsidiaries has granted any licenses or
other rights or has any obligations to grant licenses or any other rights to any
Intangibles. Neither
-5-
<PAGE>
the Company nor any of the Subsidiaries has made any material claim of violation
or infringement by others of rights to, or in connection with, the Intangibles,
and the Company knows of no basis for making any such claim. There are no
interferences or other contested proceedings, either pending or, to the
knowledge of the Company, threatened, in the United States Copyright Office, the
United States Patent and Trademark Office, or any federal, state or local court
or before any other governmental agency or tribunal, relating to any pending
application with respect to the Intangibles.
(d) The Company and each of the Subsidiaries have (i) good and valid
title to each of the items of personal property and good, marketable, and
insurable fee title to all real property reflected in its financial statements
referred to in Section 4(s) or referred to in the Registration Statement and the
Prospectus as being owned by it and (ii) valid and enforceable leasehold
interests in each of the items of real and personal property which are referred
to in the Registration Statement and the Prospectus as being leased by it, in
each case free and clear of all liens, encumbrances, claims, security interests,
defects or rights of way. No financing statement under the Uniform Commercial
Code with respect to any assets of the Company or the Subsidiaries has been
filed in any jurisdiction, and neither the Company nor any of the Subsidiaries
has signed any such financing statement or any security agreement authorizing
any secured party thereunder to file any such financing statement. All real
property of the Company and the Subsidiaries reflected in the financial
statements referred in Section 4(s) or referred to in the Registration Statement
and the Prospectus as being owned thereby is in good condition and conforms in
all material respects with all applicable building, zoning, land use and other
laws, ordinances, codes, orders and regulations (other than environmental laws,
which are addressed in Section 4(f)), and the use of such real property conforms
in all material respects with such laws, ordinances, codes, orders and
regulations, and all necessary occupancy, certificates, and permits for the
lawful use and occupancy thereof and the equipment thereof have been issued. All
notices of violations of laws, ordinances, codes, orders or regulations issued
by any governmental authority having jurisdiction over or affecting any such
real property have been complied with by the Company or the Subsidiaries, as
applicable.
(e) Except as described in the Registration Statement and the
Prospectus, there is no pending or, to the knowledge of the Company, threatened,
lawsuit or claim with respect to the Company or any of the Subsidiaries which
(i) involves a claim by or against the Company or any of the Subsidiaries, as
applicable, of more than $50,000, (ii) seeks injunctive relief that could have a
material adverse effect on the Company, or (iii) could materially and adversely
affect the performance by the Company or any of the Subsidiaries of their
obligations pursuant to this Agreement or the transactions contemplated hereby.
Neither the Company nor any of the Subsidiaries is in default under any
judgment, order or decree of any court, administrative agency or commission or
other governmental authority or
-6-
<PAGE>
instrumentality, domestic or foreign, applicable to it or any of its respective
properties, assets, operations or businesses. Except as described in the
Registration Statement, there is no legal or governmental or other proceeding or
investigation before any court or before or by any public body or board
(including any gaming authority relating to compliance or noncompliance with any
Gaming Law), or any claim or dispute pending or, to the Company's best
knowledge, threatened (and the Company does not know of any basis therefor),
against or involving the assets, properties or business of the Company or the
assets, properties or business of any of the Subsidiaries, that would materially
and adversely affect the value or the operation of any such assets or properties
in the hands of the Company or the Subsidiaries or the business, results of
operations, prospects or financial condition of the Company.
(f) Neither the Company nor any of the Subsidiaries has at any time
engaged in the handling, manufacture, treatment, storage, use or generation of
any Hazardous Materials (as defined below) upon any real property owned or
leased by it, except for small quantities, consistent with the ordinary and
usual conduct of such businesses handled, stored, and used in connection with
the normal operation of the business of the Company or the Subsidiaries, as
applicable, and that do not involve a material risk of environmental
contamination. Neither the Company nor any of the Subsidiaries has been a party
to any litigation in which it is alleged, nor have any of them at any time
received written notice of any allegation or of investigation of the
possibility, that any of them or any of their assets is or was subject to any
liability, clean-up or other obligation arising out of or relating to any
discharge, or the storage, handling or disposal, of any Hazardous Material.
There has been no discharge at any time by the Company or any of the
Subsidiaries of any Hazardous Material that the Company or any of the
Subsidiaries has reported or is or was obligated to report to any governmental
agency the occurrence of which may have a material adverse effect on the
Company. For the purposes of this Agreement, "Hazardous Material" means any
substance: (i) the presence of which requires investigation or remediation under
any foreign, federal, state or local statute, regulation, ordinance, order,
action, policy or common law; (ii) that is or becomes defined as a "hazardous
waste," hazardous substance," pollutant or contaminant under any foreign,
federal, state or local statute, regulation, rule or ordinance or amendments
thereto including, without limitation the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. (S) 9601, et seq.), the Resource
------
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), or both; (iii) that
------
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by
any governmental authority, agency, department, commission, board, agency or
instrumentality of the United States or of any state or any political
subdivision thereof; or (iv) which contains polychlorinated biphenyls (PCBs),
asbestos, urea formaldehyde foam insulation or radon gas.
-7-
<PAGE>
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as described
therein, (i) there has not been any material adverse change in the assets or
properties, business, results of operations, prospects or financial condition of
the Company or the Subsidiaries, whether or not arising from transactions in the
ordinary course of business; (ii) neither the Company nor any of the
Subsidiaries has sustained any loss of, or interference with, its assets,
businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree that would have a material adverse effect on the Company; and
(iii) since the date of the latest balance sheets included in the Registration
Statement and the Prospectus, except as reflected therein, neither the Company
nor any of the Subsidiaries has (A) issued any securities except pursuant to
stock option plans or outstanding options, rights or warrants or incurred any
liability or obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business, (B)
entered into any material transaction not in the ordinary course of business or
(C) declared or paid any dividend or made any distribution on any shares of its
stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its stock, other than repurchases, in
accordance with a prior written agreement, of no more than an aggregate of
______ unvested shares at their original issue price upon the holder's
termination of employment.
(h) There is no document or contract of a character required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. Each agreement listed in the exhibits to the Registration Statement is
in full force and effect and is valid and enforceable by and against the Company
or the Subsidiaries, as applicable, in accordance with its terms, assuming the
due authorization, execution, and delivery thereof by each of the other parties
thereto, except for agreements that have expired by their terms or have been
fully performed. No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default, in the due performance and
observance of any term, obligation, covenant or condition by the Company, any of
the Subsidiaries or, to the Company's knowledge, any other party, of any such
agreement, or other agreement or instrument to which the Company or any of the
Subsidiaries is now a party or by which it or its properties or business may be
bound or affected, which default or event would have a material adverse effect
on the assets or properties, business, results of operations, prospects or
financial condition of the Company.
(i) Neither the Company nor any of the Subsidiaries is in violation
of any term or provision of its charter or bylaws or of any judgment, decree,
order, statute, rule or regulation where the consequences of such violation
would have a material adverse effect on
-8-
<PAGE>
the assets or properties, business, results of operations, prospects or
financial condition of the Company.
(j) There is no labor strike, dispute or work stoppage or lockout
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company or the Subsidiaries, and no such labor strike, dispute, work
stoppage or lockout has occurred with respect to any employees of the Company or
the Subsidiaries during the two years prior to the date of this Agreement. No
union organization campaign is in progress with respect to the employees of the
Company or the Subsidiaries, and no question concerning representation exists
with respect to such employees. No unfair labor practice charge of complaint
against the Company or the Subsidiaries is pending or, to the knowledge of the
Company, threatened, before the National Labor Relations Board or similar
foreign authorities, and no such charge or complaint against the Company or any
of the Subsidiaries has been filed during the past two years. There is no
pending, or, to the knowledge of the Company, threatened, grievance that, if
decided in favor of a complainant, would have a material adverse effect on the
business, results of operations, prospects or financial condition of the
Company. No charges with respect to or relating to the Company or the
Subsidiaries are pending before the Equal Employment Opportunity Commission or
any state, local or foreign agency responsible for the prevention of unlawful
employment practices, and no such charges have been filed against the Company or
the Subsidiaries.
(k) Each of the Company and the Subsidiaries has correctly and timely
filed all necessary federal, state, local and foreign income, property and
franchise tax returns and paid all taxes required to be shown as due thereon and
all assessments received by it to the extent that the same are material and have
become due. Neither the Company nor any of its officers has any knowledge of any
tax deficiency of the Company or any of the Subsidiaries or any tax proceeding
or action pending or threatened against the Company or any of the Subsidiaries
that would materially and adversely affect the business, financial position,
stockholders' equity or results of operations, present or prospective, of the
Company. There are no liens for taxes on the assets of the Company or the
Subsidiaries, except for taxes not yet due. There are no audits pending of the
Company's or any of the Subsidiaries' tax returns, whether federal, state, local
or foreign, and there are no claims that have been or, the best of the Company's
knowledge, may be asserted relating to any such tax returns which, if determined
against the Company, would result in the assertion by any governmental agency of
any deficiency material to the Company. There have been no waivers of any
statute of limitations by the Company or any of the Subsidiaries relating to tax
returns, whether federal, state, local or foreign. The Internal Revenue Service
has not asserted or threatened to assert any assessment, claim or liability for
taxes due or to become due in connection with any review or examination of the
tax returns of the Company or any of the Subsidiaries for any year.
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<PAGE>
(l) None of the Company, any Subsidiary or any officer or director
purporting to act on behalf of the Company or any Subsidiary has during the past
five years (i) made any contributions to any candidate for political office, or
failed to disclose fully any such contributions, in violation of law; or (ii)
made any payment to any foreign, federal, state or local governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by applicable law; or (iii) made any
payment outside the ordinary course of business to any purchasing or selling
agent or person charged with similar duties of any entity to which the Company
or such Subsidiary as applicable, sells (or has in the past sold) or from which
the Company, such Subsidiary or any officer or director purporting to act on
behalf of the Company or any Subsidiary, as applicable, buys (or has in the past
bought) products for the purpose of influencing such agent or person to buy
products from or sell products to the Company or such Subsidiary, as applicable;
or (iv) engaged in any transaction, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained books and records of the Company or
such Subsidiary, as applicable.
(m) Each of the Company and the Subsidiaries has adequate liability
and other insurance policies insuring it against the risks of loss arising out
of or related to its businesses, as described in the Registration Statement and
Prospectus, issued by insurers of recognized financial responsibility.
(n) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is (or was)
taken with respect to any differences.
(o) On the date the Registration Statement or any post-effective
amendment thereto shall become effective, on the date of the Prospectus or of
any supplement or amendment to the Prospectus filed with the Commission, and on
each Closing Date, the Registration Statement and the Prospectus (and any
amendment thereof or supplement thereto) will comply, in all material respects,
with the applicable provisions of the Securities Act and the Rules and the
Exchange Act and the rules and regulations of the Commission thereunder; on the
dates referred to above neither the Registration Statement nor the Prospectus,
nor any amendment thereof or supplement thereto, will contain any untrue
statement of a material fact or will omit to state any material fact required to
be stated
-10-
<PAGE>
therein or necessary in order to make the statements therein (in light of the
circumstances in which they were made) not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus as amended or
supplemented complied in all material respects with the applicable provisions of
the Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein (in light of the
circumstances in which they were made) not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty as to the paragraph
with respect to stabilization on the inside front cover page of the Prospectus
and the statements contained under the caption "Underwriting" in the Prospectus.
The Company acknowledges that the statements referred to in the previous
sentence constitute the only information furnished in writing by the
Representatives on behalf of the several Underwriters specifically for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus.
(p) The Company has all requisite corporate power and authority to
enter into, deliver, and perform this Agreement and to issue and sell the
Shares. All necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery, and performance of this Agreement
and the issuance and sale of the Shares by the Company. This Agreement has been
duly and validly authorized, executed, and delivered by the Company and
constitutes the legal, valid, and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (A) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (B) to the extent that rights
to indemnity or contribution under this Agreement may be limited by federal and
state securities laws or the public policy underlying such laws.
(q) Neither the execution, delivery, and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or require
any consent or waiver under, or result in the execution or imposition of any
material lien, charge or encumbrance upon any properties or assets of the
Company or any Subsidiary pursuant to the terms of, any material indenture,
mortgage, deed of trust or other agreement or instrument to which the Company or
any Subsidiary is a party or by which it or any of its
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<PAGE>
properties or businesses is bound, or any material franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the Company
or any Subsidiary or violate any provision of the charter or by-laws of the
Company or any Subsidiary, except for such consents or waivers which have
already been obtained and are in full force and effect.
(r) No authorization, approval, consent, order, license, certificate
or permit is required of or from any governmental or regulatory body under any
foreign, federal, state or local law in connection with the execution, delivery,
and performance of this Agreement or for the consummation of the transactions
contemplated hereby, except such as have been obtained. This Agreement has been
presented to any and all governmental agencies or authorities to the extent
required to date by any applicable law, rule or regulation, including, without
limitation, any applicable Gaming Law, and this Agreement and the transactions
contemplated hereby were approved by or on behalf of such governmental agencies
or authorities to the extent required by any such law, rule or regulation and
such approvals have not been revoked, modified or rescinded.
(s) The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement and Prospectus present
fairly the financial position, results of operations and cash flows, and
stockholders' equity and the other information purported to be shown therein of
the Company at the respective dates and for the respective periods to which they
apply; and such financial statements and pro forma financial information have
been prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of the results for such periods have been
made.
(t) Deloitte & Touche LLP, whose reports are filed with the
Commission as a part of the Registration Statement and Prospectus, are and,
during the periods covered by their reports were, independent public accountants
as required by the Securities Act and the Rules.
(u) As of the Firm Shares Closing Date, the Company will have
authorized and outstanding capital stock as set forth under the caption
"Capitalization" and "Description of Capital Stock" in the Prospectus. All of
the outstanding shares of Common Stock have been duly and validly issued and are
fully paid and nonassessable, and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued and sold pursuant to
this Agreement, will be duly and validly issued, fully paid and nonassessable,
and none of them will be issued in violation of any preemptive or other similar
rights. Except as disclosed in the Registration Statement and the Prospectus,
there is no outstanding option, warrant or other right calling for the issuance
of, and there is no commitment, plan or arrangement to issue, any share of stock
of the Company or any
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<PAGE>
security convertible into, or exercisable or exchangeable for, such stock, other
than options or other rights granted or arising in the ordinary course of
business since [June 30, 1996] pursuant to stock plans described in the
Prospectus. The Common Stock and the Shares conform in all material respects to
all statements in relation thereto contained in the Registration Statement and
the Prospectus.
(v) All of the outstanding shares of capital stock of the
Subsidiaries have been duly and validly issued. All of the outstanding shares of
capital stock of the Subsidiaries are owned by the Company, directly or
indirectly, free and clear of any liens, charges or encumbrances, such shares of
capital stock are fully paid and nonassessable, and none of them was issued in
violation of any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there is no commitment,
plan or arrangement to issue, any share of capital stock of any Subsidiary or
any security convertible into, or exercisable or exchangeable for, such stock
other than options or other rights granted or arising in the ordinary course of
business since [June 30, 1996] pursuant to stock plans described in the
Prospectus.
(w) The Representatives' Warrants have been authorized for issuance
to the Representatives and will, when issued, possess rights, privileges, and
characteristics as represented in the most recent form of Representatives'
Warrants filed as an exhibit to the Registration Statement; the securities to be
issued upon exercise of the Representatives' Warrants, when issued and delivered
against payment therefor in accordance with the terms thereof, will be duly and
validly issued, fully paid, nonassessable and free of preemptive rights, and all
corporate action required to be taken for the authorization and issuance of the
Representatives' Warrants, and the securities to be issued upon their exercise,
has been validly and sufficiently taken.
(x) Except as described in the Registration Statement and Prospectus,
there are no persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company or any Subsidiary under the Securities Act. Each
stockholder, director, and executive officer of the Company has delivered to the
Representatives his enforceable written agreement that he will not, for a period
of 180 days after the closing of the Offering [or, with respect to certain
stockholders holding less than _____ shares each, for a period of 180 days after
the effective date of the Registration Statement], offer for sale, sell,
distribute, grant any option for the sale of, or otherwise dispose of, directly
or indirectly, or exercise any registration rights with respect to, any shares
of Common Stock (or any securities convertible into, exercisable for, or
exchangeable for any shares of Common Stock) owned by him, without the prior
written consent of the Representatives.
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<PAGE>
(y) No transaction has occurred between or among the Company or any
Subsidiary and any of their officers or directors or any affiliate or affiliates
of any such officer or director that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(z) The Shares have been approved for quotation on the Nasdaq National
Market.
(aa) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(bb) Neither the Company nor any of its directors, officers or
controlling persons has taken or will take, directly or indirectly, any action
resulting in a violation of Rule 10b-6 under the Exchange Act, or designed to
cause or result under the Securities Act or otherwise in, or which has
constituted or which reasonably might be expected to constitute, the
stabilization or manipulation of the price of any securities of the Company or
facilitation of the sale or resale of the Shares.
(cc) Neither the Company nor any of the Subsidiaries has incurred any
liability for finder's or broker's fees or agent's commissions in connection
with the execution and delivery of this Agreement, the offer and sale of the
Shares or the transactions contemplated hereby.
(dd) The Company is not required to register as a "broker" or "dealer"
in accordance with the provisions of the Exchange Act or the rules and
regulations promulgated thereunder.
5. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(A)(a) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for
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<PAGE>
additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the satisfaction of the Representatives.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section 5(d) shall
be true and correct when made and on and as of each Closing Date as if made on
such date and the Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive officer and the chief financial officer of the Company to
the effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, and this Agreement and that the
representations and warranties of the Company in this Agreement are true and
correct on and as of such Closing Date with the same effect as if made on such
Closing Date, and that the Company has performed all covenants and agreements
and satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date.
(e) The Representatives shall have received on the Effective Date,
at the time this Agreement is executed, and on each Closing Date, a signed
letter from Deloitte & Touche LLP addressed to the Representatives and dated,
respectively, the Effective Date, the date of this Agreement, and each such
Closing Date, in form and substance reasonably satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and stating in
effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Consolidated Financial Data" and "Selected Consolidated Financial and Other
Data," carrying out certain procedures (but not an examination in accordance
with generally accepted auditing standards) that would not necessarily reveal
matters of significance with respect to the comments set forth in such letter, a
reading of the minutes of the meetings of the stockholders and directors of the
Company, and inquiries of certain officials of the Company who have
responsibility
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<PAGE>
for financial and accounting matters of the Company as to transactions and
events subsequent to the date of the latest audited financial statements, except
as disclosed in the Registration Statement and the Prospectus, nothing came to
their attention which caused them to believe that:
(A) the unaudited financial statements and supporting
schedules of the Company included in the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements of
the Securities Act and the Rules or are not presented in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement;
(B) the amounts in "Summary Consolidated Financial Data"
and "Selected Consolidated Financial and Other Data" included in the
Registration Statement and the Prospectus do not agree with the corresponding
amounts in the audited and unaudited financial statements from which such
amounts were derived; or
(C) with respect to the Company, there were, at a specified
date not more than five business days prior to the date of the letter, any
increases in long-term liabilities of the Company or any decreases in net income
or the stockholders' equity in the Company, as compared with the amounts shown
on the Company's audited balance sheet dated December 31, 1995 and the unaudited
balance sheet dated March 31, 1996 included in the Registration Statement; and
(iii) they have performed certain other procedures as a result
of which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company) set
forth in the Registration Statement and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the Company.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the date of
the letter.
(f) The Representatives shall have received on each Closing Date from
Gray Cary Ware & Friedenrich, A Professional Corporation, counsel for the
Company, an opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that:
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<PAGE>
(i) The Company has been duly incorporated and organized and
is validly existing as a corporation in good standing under the laws of
California. Each Subsidiary has been incorporated and organized and is validly
existing under the laws of its jurisdiction of incorporation. The Company and
the Subsidiaries are in good standing as foreign corporations in all
jurisdictions in which the nature of their businesses requires them to be
qualified to do business as a foreign corporation.
(ii) The Company and each Subsidiary has all requisite
corporate power and authority and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits required under federal law
to own, lease and license its assets and properties and to conduct its business
as now being conducted and as described in the Registration Statement and the
Prospectus. The Company has all requisite corporate power and authority and all
necessary authorizations, approvals, consents, orders, licenses, certificates
and permits to enter into, deliver and perform this Agreement and to issue and
sell the Shares, other than those authorizations, approvals, consents, orders,
licenses, certificates and permits required under state and foreign securities
laws; provided that, with respect to the applicability of the Gaming Laws of
-------------
Colorado, Nevada, Missouri, New Jersey, and Mississippi to the Company and the
respective Subsidiary operating in such state, and to any authorization,
approval, consent, order, license, certificate and permit required under the
Gaming Laws of such jurisdictions, such opinion may be provided by the Company's
regular gaming counsel in each of Colorado, Nevada, Missouri, New Jersey, and
Mississippi. To such counsel's knowledge, the Company does not control, directly
or indirectly, any corporation, partnership, joint venture, association or other
business organization other than the Subsidiaries.
(iii) The Company has authorized and issued capital stock as set
forth in the Registration Statement and the Prospectus; the certificates
evidencing the Shares are in due and proper legal form and have been duly
authorized for issuance by the Company; all of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and have been duly
and validly issued and are fully paid and nonassessable and none of them was
issued in violation of any preemptive or similar right. The Shares, when issued
and sold pursuant to this Agreement, will be duly and validly issued,
outstanding, fully paid and nonassessable and none of them will have been issued
in violation of any preemptive or similar right. To such counsel's knowledge,
except as disclosed in the Registration Statement and the Prospectus, there is
no outstanding subscription, option, warrant or other right calling for the
issuance of any share of stock of the Company or any Subsidiary or any security
convertible into, exercisable for, or exchangeable for stock of the Company or
any Subsidiary other than options or other rights granted or arising in the
ordinary course of business since [June 30, 1996] pursuant to stock plans
described in the Prospectus. The Common Stock and the Shares conform in all
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<PAGE>
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(iv) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares. This Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (A) as such enforceability may
be limited by applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, receivership, moratorium or other similar laws then
or thereafter in effect relating to or affecting the rights of creditors
generally and by general equitable principles regardless of whether enforcement
is considered in proceedings at law or in equity (including the possible
unavailability of specific performance or injunctive relief and the general
discretion of the court or tribunal considering the matter) and (B) to the
extent that rights to indemnity or contribution under this Agreement may be
unenforceable under certain circumstances under law or court decisions with
respect to a liability where indemnification or contribution is contrary to law
or public policy.
(v) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company of
the Shares) will give rise to a right to terminate or accelerate the due date of
any payment due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or any event which with notice or lapse
of time, or both, would constitute a default) under, or require a consent or
waiver under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any Subsidiary,
pursuant to the express terms of any indenture, mortgage, deed of trust, note or
other agreement or instrument filed as an exhibit to the Registration Statement
and to which the Company or any Subsidiary is a party or by which it or any of
its properties or businesses is bound, or any franchise, license, permit,
judgment, decree, or order known to such counsel or any statute, rule or
regulation binding upon or applicable to the Company or any Subsidiary; provided
--------
that, such opinion with respect to the Gaming Laws of each of Colorado, Nevada,
- ----
Missouri, New Jersey, and Mississippi, and any rule or regulation binding upon
or applicable to the Company or any Subsidiary thereunder, may be provided by
the Company's regular gaming counsel in each of Colorado, Nevada, Missouri, New
Jersey, and Mississippi.
(vi) Except as described in the Registration Statement and the
Prospectus, to such counsel's knowledge, no default exists, and no event has
occurred which with notice or lapse of time, or both, would constitute a default
in the due performance and
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<PAGE>
observance of any express term, covenant or condition by the Company or any
Subsidiary of any indenture, mortgage, deed of trust, note or any other
agreement filed as an exhibit to the Registration Statement, where the
consequences of such default would have a material and adverse effect on the
assets, properties or business of the Company.
(vii) To such counsel's knowledge, neither the Company nor any
of the Subsidiaries is in violation of any term or provision of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation under
federal law, where the consequences of such violation would have a material
adverse effect on the assets, properties or businesses of the Company.
(viii) No authorization, approval, consent, order, license,
certificate or permit or order of any court or governmental agency or body is
required under federal law for the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby or any
other transaction described in the Registration Statement to be entered into
prior to or contemporaneously with the sale of the Shares, except (a) as
disclosed in the Registration Statement, (b) such as have been obtained and (c)
such as are required under state and foreign securities laws.
(ix) To such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation before any court or before or
by any public body or board pending or threatened against the Company or any of
the Subsidiaries which is required to be disclosed in the Prospectus and which
is not so disclosed.
(x) The statements in the Prospectus under the captions
"__________________", insofar as such statements constitute a summary of
documents referred to therein or matters of law, are fair summaries in all
material respects and accurately present the information called for by the
Securities Act and the Rules with respect to such documents and matters. To
such counsel's knowledge, all contracts and other documents required to be filed
as exhibits to, or described in, the Registration Statement have been so filed
with the Commission or are fairly described in the Registration Statement, as
the case may be.
(xi) The Registration Statement, all preliminary prospectuses
and the Prospectus and each amendment or supplement thereto (except for the
financial statements and schedules and other financial and statistical data
included therein, as to which such counsel expresses no opinion) comply as to
form in all material respects with the requirements of the Securities Act and
the Rules.
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<PAGE>
(xii) The Registration Statement has become effective under the
Securities Act, and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are threatened, pending or
contemplated.
(xiii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiv) The Shares have been approved for quotation on the Nasdaq
National Market.
(xv) To such counsel's knowledge, there are no persons with
registration or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under the
Securities Act, except as disclosed in the Registration Statement and the
Prospectus.
To the extent deemed advisable by such counsel, they may rely as to matters
of fact on certificates of officers of the Company and public officials and on
the opinions of other counsel satisfactory to the Representatives as to matters
which are governed by laws other than the laws of the State of California and
the federal laws of the United States; provided that such counsel shall state
that in their opinion that they believe the Underwriters and they are justified
in relying on such other opinions. Copies of such certificates and other
opinions shall be furnished upon request to the Representatives and counsel for
the Underwriters.
In addition, such opinion shall include a statement to the effect that,
although such counsel has not verified, and is not passing upon and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), no facts have come to the attention of such
counsel which lead such counsel to believe that, under the Securities Act and
the Rules, the Registration Statement at the time it became effective contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or that,
as of the date of the Prospectus, as amended or supplemented, the Prospectus as
so amended or supplemented contained any untrue statement of a material fact or
omitted to state a material fact necessary In order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (in each case except with respect to the financial statements and
notes and schedules thereto and other financial and Statistical data, as to
which such counsel need make no statement).
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<PAGE>
(g) The Representatives shall have received on each Closing Date from
Stoel Rives LLP, counsel for the Underwriters, an opinion, addressed to the
Representatives and dated such Closing Date, and addressing such customary
matters as the Representatives shall reasonably request.
6. Covenants of the Company.
------------------------
(A) The Company covenants and agrees as follows:
(a) The Company shall prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act, and shall promptly advise the Representatives (i) when any
amendment to the Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (iii) of the prevention or
suspension of the use of any preliminary prospectus or the Prospectus or of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose, and (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company shall not file or prepare any amendment of the
Registration Statement or supplement to the Prospectus unless the Company has
furnished the Representatives a copy for its review within a reasonable amount
of time prior to filing or use, and shall not file or use any such proposed
amendment or supplement to which the Representatives reasonably object. The
Company shall use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or the Rules, the
Company promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 6(A), an amendment or
supplement which shall correct such statement or omission or an amendment which
shall effect such compliance.
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<PAGE>
(c) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not later than 45
days after the end of the 12-month period beginning at the end of the fiscal
quarter of the Company during which the "effective date" (as defined in Rule 158
of the Rules) occurs (or 90 days if such 12-month period coincides with the
Company's fiscal year), an earnings statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the provisions of
Section 11(a) of the Securities Act. The Company may satisfy this requirement by
complying with Rule 158 of the Rules.
(d) The Company shall furnish to the Representatives and counsel for
the Underwriters, without charge, four signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to each
other Underwriter a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(e) The Company shall cooperate with the Representatives and their
counsel in endeavoring to qualify the Shares for offer and sale under the laws
of such jurisdictions as the Representatives may designate and shall maintain
such qualifications in effect so long as required for the distribution of the
Shares; provided, however, that the Company shall not be required in connection
-----------------
therewith, as a condition thereof, to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or subject
itself to taxation as doing business in any jurisdiction. In each jurisdiction
in which the Shares have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the Effective Date.
(f) For a period of five years after the date of this Agreement, the
Company shall supply to the Representatives, and to each other Underwriter who
may so request in writing, copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and shall furnish to
the Representatives a copy of each annual or other report it shall be required
to file with the Commission (including the Report on Form SR required by Rule
463 of the Rules).
(g) Without the prior written consent of the Representatives, for a
period of 180 days after the date of this Agreement, the Company shall not
issue, sell or register with the Commission (other than on Form S-8 or on any
successor form), or otherwise
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<PAGE>
dispose of, directly or indirectly, any equity securities of the Company (or any
securities convertible into or exercisable or exchangeable for equity securities
of the Company), except for the issuance of the Shares pursuant to the
Registration Statement and the issuance of shares pursuant to the Company's
existing stock option plan(s). In the event that, during this period, (i) any
shares are issued pursuant to the Company's existing stock option plan(s) or
(ii) any registration is effected on Form S-8 or on any successor form, the
Company shall obtain the written agreement of each grantee or purchaser or
holder of such registered securities who obtains _________ or more shares or
rights to purchase shares that vest within such 180 day period that, for a
period of 180 days after the date of this Agreement, such person will not,
without the prior written consent of Deutsche Morgan Grenfell/C. J. Lawrence
Inc., offer for sale, sell, distribute, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or exercise any registration
rights with respect to, any shares of Common Stock (or any securities
convertible into, exercisable for, or exchangeable for any shares of Common
Stock) owned by such person.
(h) On or before completion of this offering, the Company shall make
all filings required under applicable securities laws and by the Nasdaq Stock
Market (including any required registration under the Exchange Act).
(i) Prior to a Closing Date, the Company will not issue, directly or
indirectly, without the Representatives' prior written consent which shall not
be unreasonably withheld, any press release or other communication or hold any
press conference with respect to the Company or its activities or this offering,
other than press releases issued in the ordinary course of the Company's
business with respect to the Company's operations.
(j) The Company will comply with all of the provisions of any
undertakings contained in the Prospectus or the Registration Statement.
(k) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus.
(l) Except as stated in this Agreement and in the Prospectus, the
Company will not take, directly or indirectly (except for any action taken by
the Underwriters), any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(m) The Company will not make any payments or distributions to its
shareholders for the purpose of funding, directly or indirectly, any tax
liabilities of its shareholders.
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<PAGE>
(B) The Company agrees to pay, or reimburse if paid by the Representatives,
whether or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the public offering
of the Shares and the performance of the obligations of the Company under this
Agreement, including those relating to: (i) the preparation, printing, filing,
and distribution of the Registration Statement, including all exhibits thereto,
each preliminary prospectus, the Prospectus, all amendments and supplements to
the Registration Statement and the Prospectus, and the printing, filing, and
distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters to the Representatives; (iii)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
6(A)(e), including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and the
preparation, printing, distribution, and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of
shipping and mailing) to the Representatives and to the Underwriters of copies
of each preliminary prospectus, the Prospectus and all amendments or supplements
to the Prospectus, and of the several documents required by this Section to be
so furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom Shares
may be sold; (v) the filing fees of the National Association of Securities
Dealers, Inc., in connection with its review of the terms of the public
offering; (vi) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of all reports and information
required by Section 6(A)(f); (vii) inclusion of the Shares for quotation on the
Nasdaq National Market, and (viii) all transfer taxes, if any, with respect to
the sale and delivery of the Shares by the Company to the Underwriters. Subject
to the provisions of Section 9, the Underwriters agree to pay, whether or not
the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
7. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each of their respective officers, directors, partners, employees,
agents, and counsel, and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages, and liabilities,
joint or several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they, or any of
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<PAGE>
them, may become subject under the Securities Act, the Exchange Act or other
foreign, federal or state law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that such indemnity shall not inure to the benefit of any
- -------- -------
Underwriter (or any officers, directors, parties, employees, agents, counsel or
any person controlling such Underwriter) on account of any losses, claims,
damages or liabilities arising from the sale of the Shares to any person by such
Underwriter if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration Statement or
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with the information furnished in writing to the Company by the
Representatives on behalf of any Underwriter specifically for use therein as
described in Section 4(s); and provided further, that such indemnity with
-------- -------
respect to any preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased shares, or any person controlling such Underwriter, if a
copy of the Prospectus, as the same may be amended or supplemented, was not sent
or given by or on behalf of such Underwriter to such person within the time
required by the Securities Act, and the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company, and each officer of the Company who
signs the Registration Statement, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission that was made in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on behalf
of such Underwriter specifically for use therein; provided, however, that the
-------- -------
obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 will, promptly after receipt of notice of commencement of
any action, suit or
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<PAGE>
proceeding against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section, notify each such
indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 7(a) or 7(b) shall be available to any party who shall fail to give
notice as provided in this Section 7(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was materially prejudiced by the failure to give such notice, but the omission
so to notify such indemnifying party of any such action, suit or proceeding
shall not relieve it from any liability that it may have to any indemnified
party for contribution or otherwise than under this Section. In case any such
action, suit or proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in
any such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action, suit,
proceeding or claim effected without its written consent; provided, however,
-------- -------
that such consent has not been unreasonably withheld.
8. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnification provided for in Section 7(a) is
due in accordance with its terms but for any reason is held to be unavailable
from the Company, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages, and liabilities (including any investigation,
legal, and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by the Company from persons other
than the Underwriters, such as persons who control the Company within the
meaning of the
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<PAGE>
Securities Act, officers of the Company who signed the Registration Statement
and directors of the Company, who also may be liable for contribution) to which
the Company and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other, from the offering
of the Shares or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company, on the one hand, and the Underwriters, on the
other, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before deducting
expenses) received by the Company, as set forth in the table on the cover page
of the Prospectus, bear to (y) the underwriting discounts received by the
Underwriters, as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact related to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information,
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter (except as may be provided in the
Agreement Among Underwriters) be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder, and (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that no
-----------------
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to
clauses (i) and (ii) in the immediately preceding sentence of this Section 8.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against
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<PAGE>
such party in respect of which a claim for contribution may be made against
another party or parties under this Section, notify such party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties from whom contribution may be sought shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have hereunder or otherwise than under this Section, except to the extent of any
material prejudice resulting from such failure to notify. No party shall be
liable for contribution with respect to any action, suit, proceeding or claim
settled without its written consent; provided, however, that such written
-----------------
consent has not been unreasonably withheld. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to their
respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to the
-----------
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time
(a) in the sole and absolute discretion and judgment of the
Representatives at or before any Closing Date: (i) if the Company shall have
sustained a material or substantial loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or
not said loss shall have been insured, will make it inadvisable to proceed with
the offering; (ii) if there has been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the business, operations, earnings, prospects,
properties or financial condition of the Company, whether or not arising in the
ordinary course of business; (iii) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Representatives will in the future materially disrupt, the
securities markets; (iv) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Representatives, inadvisable to proceed with the offering; (v) if there
shall be such a material adverse change in general financial, political or
economic conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares; (vi) if
trading in the Shares has been suspended by the Commission or trading generally
on any of the New York Stock Exchange, Inc., the American Stock Exchange, Inc.,
or the Nasdaq Stock Market has been suspended or limited, or minimum or maximum
ranges for prices for securities shall have been fixed, or maximum ranges for
prices for securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any other
governmental or regulatory authority; or (vii) if a banking moratorium has been
declared by any state or Federal authority, or
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<PAGE>
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters shall
----------------------------
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable, or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to an additional
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<PAGE>
business day within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives to
purchase such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus)
may be effected by the Representatives and the Company. If the number of Shares
to be purchased on such Closing Date by such defaulting Underwriter or
Underwriters shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this Section
within the period stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company and without liability on the part
of the Company, except both cases as provided in Sections 6(B), 7, 8, and 9. The
provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriters arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations, warranties,
-------------
indemnities, and other statements of the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement shall remain in
full force and effect, regardless of any indemnification made by or on behalf of
any Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Sections 7 and 8 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 6(B), 7, 8, and 9 shall
survive the termination or cancellation of this Agreement.
This Agreement shall become effective upon its execution and delivery
except that the Representatives may, at their option, delay its effectiveness
until 11:00 a.m., New York time, on the first full business day following the
effective date of the Registration Statement, or at such earlier time after the
effective date of the Registration Statement as the Representatives, in their
discretion, shall first commence the initial public offering by the Underwriters
of any of the Stock. The time of commencement of the initial public offering
shall mean the time of release by the Representatives of the first newspaper
advertisement with respect to the Shares, or the time when the Shares are first
generally offered by the Underwriters to dealers by letter, fax or other means
of written communication, whichever shall first occur. This Agreement may be
terminated by the Representatives at any time
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<PAGE>
before it becomes effective as provided above, except that Sections 6(B), 7, 8,
and 9 shall remain in effect notwithstanding such termination.
This Agreement has been and is made for the benefit of the Underwriters and
the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the Underwriters
or the Company, and directors and officers of the Company, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include any purchaser of Shares from any Underwriter merely because of such
purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Representatives, c/o Deutsche Morgan Grenfell/C. J. Lawrence Inc., 31
West 52nd Street, New York, New York 10019-6160 Attention: Harry C. Hagerty,
III, and (b) if to the Company, to its agent for service as such agent's address
appears on the cover page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
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<PAGE>
Confirmed:
Deutsche Morgan Grenfell/C. J. Lawrence, Inc.
Acting severally on behalf of themselves
and as Representatives of the several
Underwriters named in Schedule I annexed hereto.
By: [NAME]
By: _____________________________
Name: __________________________
Title: ___________________________
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<PAGE>
SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
- ---- --------------
Deutsche Morgan Grenfell/C. J. Lawrence Inc.
Bear, Stearns & Co. Inc.
Montgomery Securities
Oppenheimer & Co., Inc.
TOTAL
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<PAGE>
EXHIBIT 1.2
THIS WARRANT HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
AND IS NOT TRANSFERABLE
EXCEPT AS PROVIDED HEREIN
SILICON GAMING, INC.
PURCHASE WARRANT
Issued to:
____________________________________________
Exercisable to Purchase
______ Shares of Common Stock
of
SILICON GAMING, INC.
Void after ___________, 2001
<PAGE>
This is to certify that, for value received and subject to the terms and
conditions set forth below, the Warrantholder (hereinafter defined) is entitled
to purchase, and the Company promises and agrees to sell and issue to the
Warrantholder, at any time on or after __________, 1997 and on or before
___________, 2001, up to ______ Shares (hereinafter defined) at the Exercise
Price (hereinafter defined).
This Warrant Certificate is issued subject to the following terms and
conditions:
1. Definitions of Certain Terms. Except as may be otherwise clearly
----------------------------
required by the context, the following terms have the following meanings:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Cashless Exercise" means an exercise of Warrants in which, in lieu of
payment of the Exercise Price, the Holder elects to reduce the number of the
Securities issuable upon such exercise by a number of such Securities having a
Market Value equal to the Exercise Price with respect to such exercise.
(c) Closing Date" means the date on which the Offering is closed.
(d) "Commission" means the Securities and Exchange Commission.
(e) "Common Stock" means the common stock, $0.001 par value, of the
Company.
(f) "Company" means Silicon Gaming, Inc., a California corporation.
(g) "Company's Expenses" means any and all expenses payable by the Company
or the Warrantholder in connection with an offering described in Section 6
hereof, except Warrantholder's Expenses.
(h) "Effective Date" means the date on which the Registration Statement is
declared effective by the Commission.
(i) "Exercise Price" means the price at which the Warrantholder may
purchase one Share (or Securities obtainable in lieu of one Share) upon exercise
of Warrants as determined from time to time pursuant to the provisions hereof.
The initial Exercise Price is $_____ per Share.
(j) "Legal Opinion" means the opinion of a law firm reasonably acceptable
to the Warrantholders, addressed to each of the Warrantholders, to the effect
that the Securities issuable on exercise of the Warrants may be immediately
resold to the public in the United States by the Warrantholders subject only to
limitations with respect to volume, manner of sale and the like that do not
materially impair the ability of the Warrantholders to resell such Securities or
the value thereof. An opinion that is conditioned on a Cashless Exercise of the
Warrants shall qualify as a Legal Opinion.
(k) "Market Value" means, with respect to any Securities traded on Nasdaq
or any national securities exchange, the average closing price thereof, as
reported by Nasdaq or such exchange, for the twenty trading days next preceding
a Cashless Exercise and, with respect to any other Securities, the fair value
thereof as determined in any manner agreed to by the Company and the
Warrantholder or, in the absence of such agreement, as directed by any court of
competent jurisdiction to which the Company or the Warrantholder may apply.
(l) "Offering" means the public offering of Shares made pursuant to the
Registration Statement.
(m) "Participating Underwriter" means any underwriter participating in the
sale of the Securities pursuant to a registration under Section 6 of this
Warrant Certificate.
(n) "Registration Statement" means the Company's registration statement
(File No.333-4793) as amended on the Closing Date.
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(o) "Rules and Regulations" means the rules and regulations of the
Commission adopted under the Act.
(p) "Securities" means the securities obtained or obtainable upon exercise
of the Warrant or securities obtained or obtainable upon exercise, exchange, or
conversion of such securities.
(q) "Share" shall mean, as the context requires, either (i) a share of
Common Stock which is one of the shares of Common Stock offered to the public
through the prospectus included in the Registration Statement or (ii) an
identical share of Common Stock for which the Warrant is initially exercisable.
(r) "Warrant Certificate" means a certificate evidencing the Warrant.
(s) "Warrantholder" means a record holder of the Warrant or Securities.
The initial Warrantholder is ____________________.
(t) "Warrantholder's Expenses" means the sum of (i) the aggregate amount
of cash payments made to an underwriter, underwriting syndicate, or agent in
connection with an offering described in Section 6 hereof multiplied by a
fraction the numerator of which is the aggregate sales price of the Securities
sold by such underwriter, underwriting syndicate, or agent in such offering and
the denominator of which is the aggregate sales price of all of the securities
sold by such underwriter, underwriting syndicate, or agent in such offering and
(ii) all out-of-pocket expenses of the Warrantholder, except for the fees and
disbursements of one firm retained as legal counsel for the Warrantholder that
will be paid by the Company.
(u) "Warrant" means the warrant evidenced by this certificate, any similar
certificate issued in connection with the Offering, or any certificate obtained
upon transfer or partial exercise of the Warrant evidenced by any such
certificate.
2. Exercise of Warrants. All or any part of the Warrant may be exercised
--------------------
commencing on the first anniversary of the Effective Date and ending at 5 p.m.
Pacific Time on the fifth anniversary of the Effective Date by surrendering this
Warrant Certificate, together with appropriate instructions, duly executed by
the Warrantholder or by its duly authorized attorney, at the office of the
Company, 2800 W. Bayshore Road, Palo Alto, California 94303, or at such other
office or agency as the Company may designate. Upon receipt of notice of
exercise, the Company shall immediately instruct its transfer agent to prepare
certificates for the Securities to be received by the Warrantholder upon
completion of the Warrant exercise. When such certificates are prepared, the
Company shall notify the Warrantholder and promptly deliver such certificates to
the Warrantholder or as per the Warrantholder's instructions, provided, however,
that, unless the Holder has elected to consummate a Cashless Exercise, the
Company need not deliver such certificates until receipt by the Company of
payment in full by the Warrantholder, in lawful money of the United States, of
the Exercise Price payable with respect to the Securities being purchased. If
the Warrantholder shall represent and warrant that all applicable registration
and prospectus delivery requirements for their sale have been complied with upon
sale of the Securities received upon exercise of the Warrant, such certificates
shall not bear a legend with respect to the Securities Act of 1933.
At the option of the Warrantholder, and in lieu of payment of the Exercise
Price in cash, as described in the preceding paragraph, the Holder may elect to
consummate a Cashless Exercise with respect to all or any portion of the
Warrants held by such Warrantholder.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant Certificate (dated the date hereof), in form and
tenor similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised. The Securities to be obtained on exercise of the Warrant
will be deemed to have been issued, and any person exercising the Warrants will
be deemed to have become a holder of record of those Securities, as of the date
of the payment of the Exercise Price.
3. Adjustments in Certain Events. The number, class, and price of
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Securities for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the happening of certain events as follows:
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(a) If the outstanding shares of the Company's Common Stock are divided
into a greater number of shares or a dividend in stock is paid on the Common
Stock, the number of shares of Common Stock for which the Warrant is then
exercisable will be proportionately increased and the Exercise Price will be
proportionately reduced; and, conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, the number
of shares of Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased. The increases and reductions provided for in this subsection 3(a)
will be made with the intent and, as nearly as practicable, the effect that
neither the percentage of the total equity of the Company obtainable on exercise
of the Warrants nor the price payable for such percentage upon such exercise
will be affected by any event described in this subsection 3(a).
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company, or other
change in the capital structure of the Company, then, as a condition of such
change, lawful and adequate provision will be made so that the holder of this
Warrant Certificate will have the right thereafter to receive upon the exercise
of the Warrant the kind and amount of shares of stock or other securities or
property to which he would have been entitled if, immediately prior to such
event, he had held the number of shares of Common Stock obtainable upon the
exercise of the Warrant. In any such case, appropriate adjustment will be made
in the application of the provisions set forth herein with respect to the rights
and interest thereafter of the Warrantholder, to the end that the provisions set
forth herein will thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the exercise of the Warrant. The Company will not permit any change in its
capital structure to occur unless the issuer of the shares of stock or other
securities to be received by the holder of this Warrant Certificate, if not the
Company, agrees to be bound by and comply with the provisions of this Warrant
Certificate.
(c) When any adjustment is required to be made in the number of shares of
Common Stock, other securities, or the property purchasable upon exercise of the
Warrant, the Company will promptly determine the new number of such shares or
other securities or property purchasable upon exercise of the Warrant and (i)
prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the new number of such shares or other securities or
property purchasable upon exercise of the Warrant and (ii) cause a copy of such
statement to be mailed to the Warrantholder within thirty (30) days after the
date of the event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other securities will be
issued in connection with the exercise of the Warrant, but the Company will pay,
in lieu of fractional shares, a cash payment therefor on the basis of the mean
between the bid and asked prices of the Common Stock in the over-the-counter
market or the closing price on a national securities exchange on the day
immediately prior to exercise.
(e) If securities of the Company or securities of any subsidiary of the
Company are distributed pro rata to holders of any or all of the Company's
securities (other than in a transaction described in subsection 3(a)), such
number of securities will be distributed to the Warrantholder or his assignee
upon exercise of his rights hereunder as such Warrantholder or assignee would
have been entitled to if this Warrant Certificate had been exercised prior to
such distribution. The provisions with respect to adjustment of the Common
Stock provided in this Section 3 will also apply to the securities to which the
Warrantholder or his assignee is entitled under this subsection 3(e).
(f) Notwithstanding anything herein to the contrary, there will be no
adjustment made hereunder on account of the sale of the Common Stock or other
Securities purchasable upon exercise of the Warrant.
4. Reservation of Shares. The Company agrees that the number of shares of
---------------------
Common Stock or other Securities sufficient to provide for the exercise of the
Warrant upon the basis set forth above will at all times during the term of the
Warrant be reserved for exercise.
5. Validity of Securities. All Securities delivered upon the exercise of
----------------------
the Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect of
the original issuance thereof upon exercise of the Warrant.
6. Registration of Securities Issuable on Exercise of Warrant Certificate.
----------------------------------------------------------------------
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(a) Unless the Company shall have delivered a Legal Opinion to each of the
Warrantholders and such Legal Opinion shall not have been withdrawn or modified
and shall otherwise remain effective with respect to any sales of Securities on
exercise of Warrants, it will (I) register the Securities with the Commission
pursuant to the Act so as to allow the unrestricted sale of the Securities to
the public from time to time commencing on the first anniversary of the
Effective Date and ending at 5:00 p.m. Pacific Time on the fifth anniversary of
the Effective Date (the "Registration Period"), and (ii) file such applications
and other documents necessary to permit the sale of the Securities to the public
during the Registration Period in New York and California or such other states
as the Company and the Warrantholder agree to. In order to comply with the
provisions of this Section 6(a), the Company is not required to file more than
one registration statement. No registration right of any kind, "piggyback" or
otherwise, is required to last longer than five years from the Closing Date.
(b) The Company will pay all of the Company's Expenses and each
Warrantholder will pay its pro rata share of the Warrantholder's Expenses
relating to the registration, offer, and sale of the Securities.
(c) Except as specifically provided herein, the manner and conduct of the
registration, including the contents of the registration, will be entirely in
the control and at the discretion of the Company. The Company will file such
post-effective amendments and supplements as may be necessary to maintain the
currency of the registration statement during the period of its use. In
addition, if the Warrantholder participating in the registration is advised by
counsel that the registration statement, in their opinion, is deficient in any
material respect, the Company will use its best efforts to cause the
registration statement to be amended to eliminate the concerns raised.
(d) The Company will furnish to the Warrantholder the number of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as it may reasonably request
in order to facilitate the disposition of Securities owned by it.
(e) The Company will, at the request of Warrantholders holding at least 50
percent of the then outstanding Warrants, (i) furnish an opinion of the counsel
representing the Company for the purposes of the registration pursuant to this
Section 6, addressed to the Warrantholders and any Participating Underwriter,
(ii) furnish an appropriate letter from the independent public accountants of
the Company, addressed to the Warrantholders and any Participating Underwriter,
and (iii) make representations and warranties to the Warrantholders and any
Participating Underwriter. A request pursuant to this subsection (e) may be
made on three occasions. The documents required to be delivered pursuant to
this subsection (e) will be dated within ten days of the request and will be, in
form and substance, equivalent to similar documents furnished to the
underwriters in connection with the Offering, with such changes as may be
appropriate in light of changed circumstances.
7. Indemnification in Connection with Registration.
------------------------------------------------
(a) If any of the Securities are registered, the Company will indemnify
and hold harmless each selling Warrantholder, any person who controls any
selling Warrantholder within the meaning of the Act, and any Participating
Underwriter against any losses, claims, damages, or liabilities, joint or
several, to which any Warrantholder, controlling person, or Participating
Underwriter may be subject under the Act or otherwise; and it will reimburse
each Warrantholder, each controlling person, and each Participating Underwriter
for any legal or other expenses reasonably incurred by the Warrantholder,
controlling person, or Participating Underwriter in connection with
investigating or defending any such loss, claim, damage, liability, or action,
insofar as such losses, claims, damages, or liabilities, joint or several (or
actions in respect thereof), arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained, on the effective
date thereof, in any such registration statement or any preliminary prospectus
or final prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in any case
------------------
to the extent that any loss, claim, damage, or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement, preliminary prospectus,
final prospectus, or any amendment or supplement thereto, in reliance upon and
in conformity with written information furnished by a Warrantholder for use in
the preparation thereof. The indemnity agreement contained in this subparagraph
(a) will not apply to amounts paid to any claimant in settlement of any suit or
claim unless such payment is first approved by the Company, such approval not to
be unreasonably withheld.
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<PAGE>
(b) Each selling Warrantholder, as a condition of the Company's
registration obligation, will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed any registration statement
or other filing or any amendment or supplement thereto, and any person who
controls the Company within the meaning of the Act, against any losses, claims,
damages, or liabilities to which the Company or any such director, officer, or
controlling person may become subject under the Act or otherwise, and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, or controlling person in connection with investigating
or defending any such loss, claim, damage, liability, or action, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue or alleged untrue statement of any material
fact contained in said registration statement, any preliminary or final
prospectus, or other filing, or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in said
registration statement, preliminary or final prospectus, or other filing, or
amendment or supplement, in reliance upon and in conformity with written
information furnished by such Warrantholder for use in the preparation thereof;
provided, however, that the indemnity agreement contained in this subparagraph
- ------------------
(b) will not apply to amounts paid to any claimant in settlement of any suit or
claim unless such payment is first approved by the Warrantholder, such approval
not to be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under subparagraphs (a)
or (b) above of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
notify the indemnifying party of the commencement thereof; but the omission to
notify the indemnifying party will not relieve it from any liability that it may
have to any indemnified party otherwise than under subparagraphs (a) and (b).
(d) If any such action is brought against any indemnified party and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its election to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
8. Restrictions on Transfer. This Warrant Certificate and the Warrant may
------------------------
not be sold, transferred, assigned or hypothecated for a one-year period after
the Effective Date except to underwriters of the Offering or to individuals who
are either a partner or an officer of such an underwriter or by will or by
operation of law. The Warrant may be divided or combined, upon request to the
Company by the Warrantholder, into a certificate or certificates evidencing the
same aggregate number of Warrants.
9. No Rights as a Shareholder. Except as otherwise provided herein, the
--------------------------
Warrantholder will not, by virtue of ownership of the Warrant, be entitled to
any rights of a shareholder of the Company but will, upon written request to the
Company, be entitled to receive such quarterly or annual reports as the Company
distributes to its shareholders.
10. Notice. Any notices required or permitted to be given hereunder will
------
be in writing and may be served personally or by mail; and if served will be
addressed as follows:
If to the Company:
2800 W. Bayshore Road
Palo Alto, California 94303
Attn:_____________________
If to the Warrantholder:
at the address furnished
by the Warrantholder to the
Company for the purpose of
notice.
Any notice so given by mail will be deemed effectively given 48 hours after
mailing when deposited in the United States mail, registered or certified mail,
return receipt requested, postage prepaid and addressed as specified above. Any
party may by written notice to the other specify a different address for notice
purposes.
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11. Applicable Law. This Warrant Certificate will be governed by and
--------------
construed in accordance with the laws of the State of New York, without
reference to conflict of laws principles thereunder. All disputes relating to
this Warrant Certificate shall be tried before the courts of New York located in
New York, New York to the exclusion of all other courts that might have
jurisdiction.
Dated as of __________, 1996.
SILICON GAMING, INC..
By:_______________________
Its ______________________
Agreed and Accepted as of ___________, 1996
________________________________
By:_____________________________
Its ____________________________
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